A Product Has a Contribution Margin of 20% and Sells

question 183

Multiple Choice

A product has a contribution margin of 20% and sells for $100.00 per unit. Assuming fixed costs of $2 million and a goal to have an EBIT of $1 million, how many units of the product must be sold?

• A)100,000 units
• B)50,000 units
• C)120,000 units
• D)150,000 units

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Definitions:

Teletype Machines

Early communication devices used to send typed messages over long distances through telecommunication lines.

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its share price, often used by investors to gauge the income a company's stock will generate.